"[Y]ou are a poor, single parent of two in Chicago, earning $12 an hour, working full time, determined to do what is best for your family.
...your employer, ...offers you training for and promotion to a new job paying $15.
Should you take the offer?
At your present $12 an hour you are eligible for refundable tax credits, food assistance, housing assistance, child care assistance, and medical assistance worth $41,465 combined. Together with your earned income after taxes of $22,121, you are now bringing home to your kids about $63,586 a year.
If you take your employer’s offer, you’ll earn $5,451 more after taxes, $27,572. You will also become eligible for an Affordable Care Act (ACA) premium tax credit. But at that level of earned income all your other benefits would decrease by $8,336, more than your increase in net pay. That means the income you would bring home would decrease from $63,586 to $60,701.
...a move up the job ladder with a loss of $2885 in income? Or staying in your same job and keeping the larger income?
...let’s suppose that ...moving up the job ladder is key to doing so, so you take your employer’s offer of a raise to $15 an hour and the corresponding loss of $2,885 in annual income.
...you do well in your new job, you boost your knowledge and skills, and your employer offers you another promotion, with still more training and a raise to $18 an hour.
At $18 an hour full time you would earn gross income of $37,440, and net income (after taxes) of $33,023.
But earned income that high would reduce your refundable tax credit and ACA premium assistance, and eliminate your cash assistance, food assistance, housing assistance, and child care assistance, for a total reduction in government benefits of $26,820. So if you take the promotion and raise, your income would decrease from $60,701 to $39,332!
Should you take it?
Can you afford to take it?
A case could be made that it is irresponsible for you to reduce your family’s income that way.
...the problem is not restricted to Chicago; the same kind of problem exists all across the country.
...The vast majority of poor people don’t want welfare; they don’t want handouts; they want a good job with which they can support themselves and their families comfortably.
The tragedy of the American welfare system is that it traps so many people in dependency..."
http://www.zerohedge.com/news/2016-08-30/when-work-punished-again-if-you-accept-raise-you-fall-welfare-cliff
...your employer, ...offers you training for and promotion to a new job paying $15.
Should you take the offer?
At your present $12 an hour you are eligible for refundable tax credits, food assistance, housing assistance, child care assistance, and medical assistance worth $41,465 combined. Together with your earned income after taxes of $22,121, you are now bringing home to your kids about $63,586 a year.
If you take your employer’s offer, you’ll earn $5,451 more after taxes, $27,572. You will also become eligible for an Affordable Care Act (ACA) premium tax credit. But at that level of earned income all your other benefits would decrease by $8,336, more than your increase in net pay. That means the income you would bring home would decrease from $63,586 to $60,701.
You’ll earn $5,451 more after taxes, $27,572.
At that level of earned income your other benefits would decrease by $8,336,
more than your increase in net pay.
That means the income you would bring home
would decrease from $63,586 to $60,701.
...a move up the job ladder with a loss of $2885 in income? Or staying in your same job and keeping the larger income?
...let’s suppose that ...moving up the job ladder is key to doing so, so you take your employer’s offer of a raise to $15 an hour and the corresponding loss of $2,885 in annual income.
...you do well in your new job, you boost your knowledge and skills, and your employer offers you another promotion, with still more training and a raise to $18 an hour.
At $18 an hour full time you would earn gross income of $37,440, and net income (after taxes) of $33,023.
But earned income that high would reduce your refundable tax credit and ACA premium assistance, and eliminate your cash assistance, food assistance, housing assistance, and child care assistance, for a total reduction in government benefits of $26,820. So if you take the promotion and raise, your income would decrease from $60,701 to $39,332!
Should you take it?
If you take the promotion and raise,
your income would decrease from $60,701 to $39,332
Can you afford to take it?
 |
| https://fee.org/articles/if-you-accept-this-raise-you-fall-off-the-welfare-cliff/ |
...the problem is not restricted to Chicago; the same kind of problem exists all across the country.
...The vast majority of poor people don’t want welfare; they don’t want handouts; they want a good job with which they can support themselves and their families comfortably.
The tragedy of the American welfare system is that it traps so many people in dependency..."
http://www.zerohedge.com/news/2016-08-30/when-work-punished-again-if-you-accept-raise-you-fall-welfare-cliff
